0.25 rise would increase the average monthly mortgage repayments by £17 (£204 a year) and 0.5% by £35 (£420 a year)

comparethemarket.com expects to see a wave of re-mortgaging across the UK having seen a 23% leap in re-mortgaging queries in July

If the base rate increases to 2% that would add £148 to the average monthly payment (£1,776 a year)

The Monetary Policy Committee has, for the first time since December 2014, announced a split vote on increasing interest rates. Additionally in the documentation published, it has signalled an expectation that mortgage rates are likely to increase sooner due to funding costs incurred by lenders. Comparethemarket.com anticipates a wave of re-mortgaging to take place in the coming weeks as home owners look to secure better deals.

With widespread expectations of a rate rise at the turn of the year, Comparethemarket.com has looked at the impact of a 0.25%, 0.5% and 2% rate rise on mortgage holders on tracker and variable rates.

According to the Nationwide House Price Survey, the average property price is £194,258. Assuming 75% of the value of the property is borrowed, the monthly mortgage repayment (for those on a tracker) would increase by £17 with a 0.25% increase, £35 with a 0.5% increase, and £148 with a 2% increase.

Regional variances in property prices will mean the impact of a rate rise will be far more pronounced in London, assuming that the same 75% loan to value ratio applies for most mortgage holders, where a 0.5% increase will add £78 to the monthly payment, whereas in the North it will equate to a £22 increase.

As talk of a rate rise has intensified recently, comparethemarket.com has seen a 23% spike in re-mortgage queries from June to July 2015, indicating that consumers are beginning to explore ways to manage their finances with the actions of the Bank of England in mind.

Simon McCulloch, Director at comparethemarket.com, said: “Banks and building societies were offering mortgage interest rates at some of their lowest ever levels in June and July, but we have already seen a number of providers withdraw their best offers in anticipation of Bank of England interest rates increasing.

“The starting gun has been fired on a rate rise and we are anticipating a wave of re-mortgaging across the UK. Given Mark Carney has already warned that base rates could go up to 2% over the next few years, which on our average house would mean an additional monthly repayment of £148, homeowners may want to consider fixing their mortgages at a low rate now. When fixing, it is important to consider how long you are likely to remain in your property, as some fixed mortgages may carry early exit fees. But on the basis of the average house price, a fixed rate of 1.59% with Platform for two years, 2.15% with the Post Office for 3 years or 2.60% with Leeds Building Society for 5 years - all of which would mean lower monthly repayments than on the variable or tracker rate if the base rate goes up to 2%.”

Simon continued: “When re-mortgaging, consumers should also consider the impact of arrangement fees as many of the products with the lowest rates have very high fees of £1,500 and over. This is fine for people with larger mortgages balances, who should be able to claw back the fees with high monthly savings when rates rise, but for those with smaller mortgages, a slightly higher fixed rate product with lower/zero arrangement fee might be a better option. The overall cost of the mortgage should make clear how it compares.”

Top 5 2 Year Fixed Deals for the average property currently available on comparethemarket.com:

Top 5 3 Year Fixed Deals for the average property currently available on comparethemarket.com:

Top 5 5 Year Fixed Deals for the average property currently available on comparethemarket.com:

Assuming the mortgage holder is on a tracker rate 25 year mortgage with Platform, currently the cheapest available on comparethemarket.com for the LTV ratio across all property values, offering a 1.64% interest rate:

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